Our last post in this series focused on ways the it.CPG solution automates business processes. Now let’s look at how a robust SAP solution like it.CPG facilitates pallet-level tracking, thus helping companies meet demands for track-and-trace as created by the Food Safety Modernization Act. Before we dive into how this emerging technology works, however, let’s use this post to look at the dilemma that pallet-level tracking helps solve.
Food processors typically have little visibility into the quality of raw materials coming from their suppliers. A processor has no way of monitoring supply-side handling and shipping practices—and the same goes for downstream partners.
For instance, it’s crucial that food companies be able to monitor physical conditions like temperature, which plays a vital role in maintaining the quality of the produce from harvest until final consumption. For this reason, cold-chain optimization for perishable foods is becoming increasingly important.
A study by the University of Florida Food Distribution and Retailing Lab identified that one-third of shipped produce is wasted annually, amounting to a loss of $35 billion each year. Half of that waste is a result of temperature problems experienced between the grower and retailer—totaling more than $17 billion a year.
What accounts for this level of wastefulness? Well, the path between harvest and retailer for perishable produce involves many steps and handoffs, including:
· Field to warehouse/packer (via truck)
· Warehouse to distributor (via truck, plane, train)
· Distributor to wholesaler (via truck, plane, train)
· Wholesaler to retailer (via truck)
· Retail: loading dock to shelf
At each point along the way, there’s potential for trouble. Produce could wait in the field, sit in the sun on a loading dock, or be stored in a truck with broken or uneven refrigeration. Each handoff point also creates the opportunity to break the chain of responsibility. Without pallet-level temperature monitoring and logging, the warehouse can claim, for example, that the produce was fine when it left, thus leaving the distributor wondering about quality and remaining shelf life. Ultimately, the retail grocer is left making a determination on quality and can accept or reject a shipment—or re-estimate its value—with limited or inaccurate information.
This is where emerging technology comes in. Our next post will provide a detailed look at how pallet-level temperature monitoring gives companies visibility into the entire supply chain.
Information in this post is based on the work of Intelleflex, leaders in on-demand data visibility.